NATIONAL UNIVERSITY OF SINGAPORE

NUS Business School

Department of Finance

BMA5313 Private Equity

Instructor: Associate Professor Lam Swee Sum, FCPA, CFA

, BIZ1#07-50, 6516-3037

Session: Semester 2, 2012/2013

Course objectives

This course covers major private equity investment types including venture capital, buyouts, growth investing, and real estate.

Discussion covers private equity cycles, from fund raising, structuring to deal screening, valuation, investment negotiations, fund management and performance reporting. An underlying theme of this part of the course is to evaluate to what extent venture capital and private equity markets can create wealth, generate social return and promote economic growth.

A sound knowledge of venture capital and private equity is essential for the following participants in the capital markets: angels, venture capitalists, private equity specialists, private equity investors, investment managers and institutional investors with an interest to commit funds to the private equity universe, and corporate managers who need private equity funding and an understanding in management buyouts. The relation between venture capital and private equity markets and economic growth is also important for regulators.

There is also an emerging trend post-global financial crisis in venture philanthropy and impact investing. This module discusses the spectrum of entrepreneurial social finance where venture capital principles may be applied.

Pre-requisites

Students need to have read Financial Management. A good grasp of valuation principles is necessary.

Basic text

Lerner, Josh, Felda Hardymon and Ann Leamon. 2009. Venture Capital and Private Equity: A Casebook, 4th Edition. U.S.A.: Wiley.

Supplementary text

Wong, L.H. 2005. Venture Capital Fund Management: A Comprehensive Approach to Investment Practices & the Operations of a VC Firm. Singapore: Aspatore Books.

Course outline

1.  Introduction: What is private equity?

2.  The private equity cycles

3.  Types of private equity investments:

·  Venture capital

·  Buyouts

·  Growth investing

·  Mezzanine

·  Real estate

·  Entrepreneurial social finance

4.  Private equity investment processes:

·  Structuring of private equity fund

·  Fund raising

·  Sourcing, structuring and investing

·  Valuation

·  Value creation

·  Exiting

5.  Prospects:

·  Sovereign wealth funds

·  Socially responsible funds

·  Venture philanthropy funds

·  Impact investments

·  Private equity in emerging economies

Assessment methods

The assessment of the module will be based on a total of 60% for individual credit and 40% for group work:

Quizzes 40% ) individual credit

Class participation and journal 20% )

Group project and presentation 40%

LSS/

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